11 states say budget cuts "likely," according to survey

11/12/2001

November 12, 2001

Tennessee isn't the only state with budget woes. According to a 50-state survey conducted in October by the National Conference of State Legislatures and based on information from legislative fiscal directors, revenue is below forecasted levels in 44 states, and budget cuts are on the table in 28 states. The problem is largely soaring Medicaid costs and a slowing national economy. The news is not good for higher education, which, unlike spending on elementary and secondary schools, is not exempt from cuts.

Revenue shortfalls occurred in Alabama, Arkansas, Kentucky, Mississippi, North Carolina, South Carolina, Tennessee and Virginia. Alabama's governor instituted a 6.2 percent cut for all education programs last year. Tennessee needs some $300 million in additional revenue-a figure greater than expected growth in tax receipts-just to continue funding programs at their current level and cover growth in departments such as corrections and elementary education. Raises for state employees would require lawmakers to come up with still more money.

The survey, "State Fiscal Outlook for FY 2002: October Update," is available at the organization's Web site.